Dykstra: Clean Up With Procter & Gamble

Today we are going to take advantage of an opportunity in one of the premier companies in the world: Procter & Gamble (PG).

This behemoth of a company has over 135,000 employees working in over 80 countries worldwide, and provides products and services of quality and value to consumers in over 180 countries, after starting out as a small, family-operated soap and candle company.

Procter & Gamble is organized into three global business units and seven reportable segments. The beauty segment accounts for 31% of fiscal 2006 sales and 33% of net earnings. The health care segment brought in 11% in sales and 13% of net earnings, and the household care unit took in 25% and 25%.

The company's baby care and family care business pulled down 18% and 14%, while pet health, snacks and coffee raked in 6% and 4%.

Finally, the Gillette unit accounted for 5%/8% and Duracell and Braun totaled 4%/3%. PG acquired Gillette in 2005, bringing the world leader in the male and female grooming categories, as well as alkaline batteries and toothbrushes into the fold. For this reason, PG's competitive strengths -- strong brands and a strong focus on product innovation -- are second to none.

The company's approximately $68 billion in sales also give it the benefit of scale, which provides greater sales opportunities and cost savings.

Considering that PG derives just 26% of sales from developing markets, compared with 25% to 45% for its global competitors, I believe there is plenty of room for PG to grow. In a stock market where we have plenty of stocks on the new 52-week high list, PG is a bargain at this level.

I am going to place an order to buy 10 deep-in-the-money (DITM) January 50 calls (WPGAJ) calls at $12.80 or better.